FIRST COAST TICKER: New Trailer Bridge CEO speaks up

Mark Basch

Monday

Nov 30, 2009 at 12:01 AM

New Trailer Bridge Inc. (NASDAQ: TRBR) CEO Ivy Suter has been relatively quiet since she was hired by the Jacksonville-based marine and truck freight company in August. But during the company's quarterly conference call earlier this month, she was prodded into discussing the state of the company.

Suter did not say a lot during her prepared remarks in the conference call. But she did open up when an investor asked for her assessment of the company.

"As I've looked at the company, I haven't seen anything that I would say is in crisis. I don't see the company as needing to be restructured," she said.

But Suter did hint at some changes in Trailer Bridge's management, saying "the officer group needed to be streamlined."

"I saw it as being too large an officer group for this size of company, compared with my prior experience," she said.

But she also said cost-cutting was not necessarily her main goal.

"I just want to be clear that I don't view this business as shrinking ourselves to profitability. I believe we've got to aggressively manage the top line as well as all the cost lines. And in my past career, I've spent almost 50 percent of my time in marketing and business development roles," she said.

Before coming to Trailer Bridge to fill the vacant CEO slot, Suter spent more than 20 years in executive roles with a variety of industries, including marine, shipping and intermodal operations.

John Larkin, an analyst at Stifel Nicolaus, was satisfied with Suter's responses to questions.

"While we had not been familiar with Ms. Suter prior to the company third quarter earnings conference call, we viewed her comments on the call favorably," Larkin said in a research note.

Larkin also said he expects some shareholders and bondholders to continue taking an "activist approach" to Trailer Bridge's strategic decisions.

"While that shareholder/bondholder activism may pose some risk, our impression is that Ms. Suter has the appropriate background and demeanor to take actions that are in the company's best long-term interest," he said.

RailAmerica

Six weeks after its initial public offering, analysts began formal coverage of RailAmerica Inc. (NYSE: RA) last week. And all four analysts issuing reports were in agreement, rating the Jacksonville-based short-line railroad company at "buy" or "overweight" (the equivalent of buy).

One reason for the recommendations is RailAmerica's stock price. The stock fell immediately after the shares were issued at $15 each and have remained below the IPO price since then.

"While shares stumbled out of the IPO gate and the market continues to be skittish on RailAmerica, we think recent levels in the $12-$13 range provide new money investors with an attractive entry point for the stock," said Citigroup Global Markets analyst Matthew Troy in his initiation report.

Troy has a $16 target price for the stock, while William Greene of Morgan Stanley and Justin Yagerman of Deutsche Bank set a $17 target and Thomas Wadewitz of JPMorgan set an $18 target.

"We believe RailAmerica stands to benefit from positive railroad industry trends such as improving volumes in a recovering economy and stable pricing, which should drive strong operating leverage," Yagerman wrote in his report.

RailAmerica has said it is looking for acquisition targets to expand its operations, which currently consist of 40 railroads in 27 U.S. states and Canada.

"Management has a track record of turning around underperforming short-line operations that we believe can be leveraged by acquiring new properties," Greene wrote.

But while it has a good record with its existing operations, Troy noted that the company hasn't made any acquisitions since the current management team was put in place in 2007.

"The larger question, which remains to be seen, is the RailAmerica management team's price and fit discipline when pursuing growth opportunities," he said.

Patriot Transportation

As Patriot Transportation Holding Inc. (NASDAQ: PATR) continues to increase its visibility on Wall Street, the Jacksonville-based transportation and real estate company will hold its first quarterly conference call this week.

Patriot plans to release earnings for the fourth quarter ended Sept. 30 today and has scheduled a conference call with analysts and investors for Tuesday.

Patriot has been publicly traded for two decades but only recently began seeking more recognition among investors, gaining its first analyst coverage last month. The conference call is another step in the visibility process.

Medtronic

Medtronic Inc.'s (NYSE: MDT) stock jumped $2.94 to $43.25 Tuesday after reporting adjusted earnings for the second quarter ended Oct. 30 rose 12 percent to $850 million, or 77 cents a share. That was three cents a share higher than the average forecast of analysts surveyed by Thomson Financial.

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